CASE STUDY 2024
Corporation X
Corporation X, established in 1991, specializes in manufacturing, exporting, and supplying precision machined components. Additionally, they produce various types of automatic packing machines, such as automatic rusk packing machines, flow wrap machines, and inverted flow wrap machines. Corporation X holds ISO 9001:2015 certification, ensuring quality in their products and processes.
They also have 179 employees with an accumulated 401(k) asset value of $6,500,000.
Overview
In 2007, amidst the turmoil of the market crash, Corporation X faced substantial losses in their 401(k) plan, amounting to a staggering 45%. Despite efforts to recuperate, the plan remained stagnant, with minimal growth, and was further plagued by high maintenance fees and unforeseen events.
Fast forward to 2020, Covid-19 hit and the 401(k) plan experienced a downturn of 35%. Employee morale plummeted, productivity waned, and some employees considered early retirement to mitigate potential future losses.
Challenge
Over the last 14 years, Corporation X had witnessed their collective 401(k) assets evaporate from $11,198,055 to $6,500,000 despite increased contributions to the fund.
- Corporation X faced a critical juncture where the declining 401(k) plan performance threatened both employee financial security and company productivity.
- The situation necessitated a new approach to safeguard the financial well-being of both employees and the corporation.
Introduction
Welcome to the success story of Corporation X’s transformation journey with gold-backed 401(k) plan.
Discover how we turned their struggling 401(k) plan into a thriving asset, bringing stability, security, and prosperity to their employees and the company.
Losses:
- Global Financial Crisis (2008): Approximately 56% loss
- European Debt Crisis (2011): Approximately 19% loss
- Brexit (2016): Approximately 25% loss
- COVID-19 Pandemic Crash (2020): Approximately 34% loss
Total percentage loss: 56% + 19% + 25 + 34% = 134%
Number of events: 4
Average percentage loss per event = Total percentage loss/Number of events
Average percentage loss per event = 134%/4 ≈ 33.5%
The average percentage loss of equity per event based on these four major events is approximately 33.5%.
This calculation provides a rough estimate and doesn’t include the impact of other smaller market downturns.
The Solution
